zoom $ 6 9 8 Mon Price Setting 20 x M Search results - X M Inbox (1,771) - kl x M SAW: Singapore x Find r for pi equ: x Derivative Calcu x G first order cond x * Search Results X space.nyu.edu/content/enforced/308544-FA23_ECON-UB_234_1_001/Pricing%20-%20HW%20_v2023.pdf Maps 7 NYU Home Brightspace Webassign Q U X LunarCRUSH | So... 5 Santiment - See W... CM Home - Coin Metri.. Crypto Research,. CoinMarketCal - C. The Block - The Fi... M Mycryptopedia Home - Cry 23.pdf 1 1 163% + 1 1 Question 1: Pricing This is a version of the price setting model we analyzed in class. The only difference is on the cost side. In class, we directly assumed a cost function - here, we will derive it from assumptions about production function and labor costs. Suppose the firm produces output using labor as the sole input according to the function Yi = N3 The firm hires workers at a dollar wage W, which we will assume is proportional to total spending in the economy, i.e. M. Formally, W = SM I where ( is a known constant. 1. Use the above information to derive the cost function of the firm, C(Y;). Compare it to the function we assumed in class. 2. The demand function of the firm is given by Yi = (P x - (B) P. Similar to what we did in class, express the optimal price of the firm (in logs) as a weighted average of its expectation of the (log of the) exogenous shock and the average price, i.e. Pi = (1 - r) Eim + rEip + Const. (1) What is the value of r? Question 2: Equilibrium Take (1), ignore the constant term. Now, suppose m ~ N (0, 1). Assume that each firm sees 2 signals: Show All HW _v2....pdf 16 0 2